Short-term rental tax is forecast to pass the State Senate

As part of annual budget legislation, the State Senate is expected to approve a tax on short-term rentals via the web such as Airbnb, the State House News Service reported. The tax would be at the same rate as current state hotel and motel taxes. To date, Islanders who let out rooms via the web have enjoyed proceeds devoid of hospitality taxes.

The Martha’s Vineyard short-term rental market, historically strong during the season, has in recent years become white-hot with the rise of Airbnb. Many Island spaces that once were difficult to market are readily rented on the popular hosting site. This has exacerbated an increasingly fraught housing market, where year-round rentals have become scarce and their accompanying rents have inflated to summer levels. The revenue from anticipated taxes will flow to state coffers. It is unclear whether any of the tax money, or aid derived from it, will eventually trickle back to the Island to help address the year-round rental market.

1 COMMENT

All this will do is raise the price of seasonal rentals. Landlords don’t pay the tax, they collect it. AirBnB will most likely automate the collection and handle the filing and payment.

Let’s not forget that the owners of the homes are already paying federal and state income tax on any profits from renting and property tax as well.

There are many reasons that people don’t rent year-round. It’s not just rental income, here’s a few:

1. Short-Term rentals means the owner gets to also use the house when they want. 2. Short-Term rentals means less wear and tear on the house. 3. Short-Term tenants almost never have to be evicted. 4. AirBnB gives the Landlord $1 million in liability coverage and $1 million in damage coverage.

The reason people go to sites like AirBnB is that there aren’t enough hotel rooms or those hotels are outrageously priced. This tax is an effort by the hotel lobby to increase the prices of their “competition” and the politicians went along because it means more money for the state coffers. Years ago the cable companies did the same thing to satellite TV providers. Companies like AirBnB are all for taxes like this because it removes any question of whether their business is legal and makes it difficult for any homeowner to rent on their own (or with local realty firms) as the burden of doing the collection and filing of the tax for an individual will be onerous whereas large companies already have systems to handle it.

If the short-term rental homeowners are going to be paying the same taxes as the hotels shouldn’t they also receive the same discounts that commercial entities receive like lower power rates (Commercial power rates are roughly 20% lower than residential)?